Fed's Kaplan advocates for removing acommodation
President of the Federal Reserve Bank of Dallas Robert Kaplan said on Wednesday he would advocate for removing monetary accommodation despite the fact there is more room for progress on the Fed's objectives of full employment and price stability. However, the central bank should accomplish this "gradually and patiently," the policymaker added.
Speaking at the Economic Club in New York, Kaplan, who will become a voting member of the Federal Open Market Committee next year, re-stated his belief that it is important for the Fed to normalize monetary policy. This is because there are risks and costs associated with too much accommodation, especially for savers, and since it can result in distortions and imbalances in asset allocation and other business decisions, the central banker explained. What is more, he continued, it is much easier for the Fed to tighten policy than to ease it at this point in the normalization process.
In addition to these comments, Kaplan expressed optimism that the oil industry was approaching a level of balance between supply and demand, which he said should be accelerated with an Organization of Petroleum Exporting Countries (OPEC) output freeze deal.